The House is expected to vote the week of November 15 on a revised version of the Build Back Better reconciliation legislation (the bill). The revised legislation reflects changes made by the House Rules Committee on November 3 (through a substitute amendment) and a “chairman’s amendment” offered by House Budget Committee Chairman John Yarmuth (D-KY). Any House-passed version of the bill is expected to be revised in the Senate, which would require further House action.
The bill includes spending provisions described as costing $1.75 trillion over 10 years and revenue offsets believed to add up to nearly $2 trillion over the same period. The proposed revenue offsets include significant business, international, and individual tax increases, increased IRS enforcement measures, and repeal of a Medicare prescription drug rebate rule.
Individual tax provisions in the bill include state and local tax (SALT) deduction relief, a new surtax on high-income individuals and trusts, expansion of the net investment income tax, limitations on qualified small business stock exclusions, wash sale rules on cryptocurrency, various limitations and requirements for retirement savings accounts (including IRAs and Roth IRAs), and continuation of a temporary current-law limitation on excess business losses.
Outlined below is an analysis of some of the key tax provisions of the revised Build Back Better bill affecting high net-worth individuals and families.